Develop a friendship with your local bike shops. If
they know what you are doing, rather than feeling
competitive, they may be supportive, offering you a discount
on parts, advice, etc. Sometimes they will send people to you
if they do not have what the customers want.

Once your bicycle business grows to a profitable size,
you will probably want to start keeping records. If you start
your bookkeeping right from the beginning, it may be fun to
look back someday.
_____________________________________________________________

PAPERWORK

It does not really matter how you keep your paperwork,
as long as you keep it.

You must protect yourself against stolen bikes as
discussed in the buying chapter. A good idea is to file on
cards, every bike you buy. You can organize those cards by
serial number in ascending order. You can do it by the date
you bought the bike, or alphabetize by brand name. Organizing
by serial number is best, because the number will not change,
but the color may, or the brand name become obscured if
someone removes the decals. If a inquiry is made of your
files you may not remember the date you bought the bike. If
your police department requires that you fill out paperwork
on bikes purchased, they are doing your job for you, no need
to duplicate it.

You should keep track of your expenses and your income
if your business starts to grow big. I recommend Dome's
Monthly Bookkeeping book, available in almost any office
supply store. Dome's contains easy instructions and has
charts that line up all your information so that you can see
trends in your business, and so that an accountant can make
sense out of your doings without having to charge you a whole
bunch of money to figure it out.

Anything else that you want to keep track of is your
option. Some people like to make voluminous charts, or hook
up a computer to everything. This can be fun, but if it takes
up too much of your time, you will make less money.
_____________________________________________________________

SOURCES

Your bike shop charges you double on any items under
$10. They pay $5 for a $10 item. Tires go for 3 to 1. If
they pay $3, you pay $9. Small parts under $1 cost the bike
shop about 17 cents.

There is not a very good mark-up on new bikes. A $300
mountain bike costs the shop $220. They have to pay for the
shipping which is about another $10. Then the bike shop has
to pay one of their mechanics to put the bike together, they
pay a salesman to sell it, which takes about an hour
typically, and the shop pays for warranty labor which
averages $10 per bike. As you can see, you have to spend
quite a bit for a small relative profit with new bikes.

The bike shops cannot charge less. They have to pay
rent, but they also have to tie up lots of money to stock all
the specialized parts that they can manage in order to be
full service. They also have to hire people competent to give
you free advice.

If you support your local bike shop as much as you can,
they will support you. They will be able to advise you on
tough cases, and they may give you a small discount if they
know you are a volume buyer. The discount is a good business
expense if they know you will be faithful to their store.
They do not profit if all you buy is a spoke here and a bolt
there. In order to stay in business, they have to sell what
they can, and you need to send them customers for big ticket
items. If you have a customer that needs a tire or even a
bike that you can't provide, send that customer to the store
that helps you the most. Surprise, they will reciprocate! If
they know you have something that they don't have, you could
get a recommendation from them.

If you compare prices at department stores, you may be
surprised. Often department stores charge you close to the
wholesale price bike shops pay. But the department stores do
not have experienced advise, they do not carry specialized
parts. The department store is a good source for tires,
tubes, and some standard replacement parts.

As business gets bigger, you may want to start selling
new parts, or even bikes. One advantage of this is that you
can order things for your own bike and pay less than retail.
Most wholesalers will try to screen you out if you do not
have a real store. They may ask you for a sales tax permit
number, they may ask for a photograph of your store, they may
want a commercial credit application filled out.

You can get a sales tax permit (aka resale
certificate), just go downtown with $5 and bop around from
one office to another until you get to the right place. Fill
out a form or two, be willing to collect sales tax and mail a
check to the government every 3 months.

You can mail the wholesaler a picture of your barn or
whatever if they ask for a picture, or you can tell them you
are interested for future reference, when business increases.
You can just tell them you are doing a business out of your
living room, many wholesalers will accept this, because, they
are in business primarily to make money, just like you.

When a credit application comes, fill it out as well as
you can and then write C.O.D. where it asks for credit limit
desired. They like that, since there is no risk for the
wholesaler.

Many wholesalers will send you their catalog and open
an account even if you have the sketchiest looking business.
You may have a problem selling some bikes however. There is a
system in the business called protected dealership that makes
it so if one bike shop handles a certain brand of bikes, all
other shops within a certain radius cannot sell the same
brand. If you want Raleigh bikes, for instance, and there is
another Raleigh shop within 5 miles of yours, sorry. Not all
brands have protected dealership, and not all brands are
spoken for.

WHOLESALERS

Seattle Bike Supply, 1-800-283-2453 SBS will do business
with the smallest dealers, no minimum

West Coast Cycle, 1-800-252-0580 Remarkably low prices, hard
to do business if small

There are hundreds more wholesalers. Think of a bicycle brand
name, dial 1-800-555-1212 (toll-free directory assistance)
and ask if there is a phone number. Most brand wholesalers
have a parts and accessory department. There are a few trade
journals that you can subscribe to for free. These magazines
have ads from wholesalers. They have to believe you are in
the industry, not just a retail buyer looking to find out the
inside scoop. Here is an address: Bicycle Business Journal,
Box 1570, Fort Worth, TX 76101.